Speech given at Boston University on Oct. 29 - in memory of Howard Zinn
. . .
Yes, Virginia, there is a Santa Claus. But he’s run off with all the toys.
Late in August I clipped another story from the Wall Street Journal. Above an op-ed piece by Robert Frank the headline asked: “Do the Rich Need the Rest of America?” The author didn’t seem ambivalent about the answer. He wrote that as stocks have boomed, “the wealthy bounced back. And while the Main Street economy” “was wracked by high unemployment and the real-estate crash, the wealthy -- whose financial fates were more tied to capital markets than jobs and houses -- picked themselves up, brushed themselves off, and started buying luxury goods again.”
Citing the work of Michael Lind, at the Economic Growth Program of the New American Foundation, the article went on to describe how the super-rich earn their fortunes with overseas labor, selling to overseas consumers and managing financial transactions that have little to do with the rest of America, “while relying entirely or almost entirely on immigrant servants at one of several homes around the country.”
Right at that point I remembered another story that I had filed away three years ago, also from the Wall Street Journal. The reporter Ianthe Jeanne Dugan described how the private equity firm Blackstone Group swooped down on a travel reservation company in Colorado, bought it, laid off 841 employees, and recouped its entire investment in just seven months, one of the quickest returns on capital ever for such a deal. Blackstone made a killing while those workers were left to sift through the debris. They sold their homes, took part-time jobs making sandwiches and coffee, and lost their health insurance.
That fall, Blackstone’s chief executive, Stephen Schwarzman, reportedly worth over $5 billion, rented a luxurious resort in Jamaica to celebrate the marriage of his son. According to the Guardian News, the Montego Bay facility alone cost $50,000, plus thousands more to sleep 130 guests. There were drinks on the beach, dancers and a steel band, marshmallows around the fire, and then, the following day, an opulent wedding banquet with champagne and a jazz band and fireworks display that alone cost $12,500. Earlier in the year Schwarzman had rented out the Park Avenue Armory in New York (near his 35-room apartment) to celebrate his 60th birthday at a cost of $3 million. So? It’s his money, isn’t it? Yes, but consider this: The stratospheric income of private-equity partners is taxed at only 15 percent -- less than the rate paid, say, by a middle-class family. When Congress considered raising the rate on their Midas-like compensation, the financial titans flooded Washington with armed mercenaries -- armed, that is, with hard, cold cash -- and brought the “debate” to an end faster than it had taken Schwartzman to fire 841 workers. The financial class had won another round in the exploitation of working people who, if they are lucky enough to have jobs, are paying a higher tax rate than the super-rich.
So the answer to the question: “Do the Rich Need the Rest of America?” is as stark as it is ominous: Many don’t. As they form their own financial culture increasingly separated from the fate of everyone else, it is “hardly surprising,” Frank and Lind concluded, “ that so many of them should be so hostile to paying taxes to support the infrastructure and the social programs that help the majority of the American people.”
Entire video:
http://www.bu.edu/buniverse/view/?v=20ZaW9POTranscript:
http://www.ufppc.org/us-a-world-news-mainmenu-35/9981-commentary-bob-herbert-and-bill-moyers-on-democracy-and-plutocracy-in-america.html(Scroll down to "Welcome to the Plutocracy!"
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